In a significant move by the Indian government, the export of 99,500 tonnes of onions has been greenlit on Saturday, even as the country faces an overarching ban on such exports. Primarily sourced from the state of Maharashtra, these shipments are destined for six neighboring countries, providing a critical supply to the region despite concerns over domestic availability.
After the government instituted a blanket prohibitory order on onion exports on December 8, 2023, to curb the impending domestic shortage owing to anticipated lower harvests in both the Kharif and Rabi seasons of 2023-24, this announcement serves as a pivotal exception.
The Ministry of Consumer Affairs, Food & Public Distribution issued a statement elaborating that the sanctioned 99,150 tonnes of onions are earmarked for Bangladesh, the United Arab Emirates, Bhutan, Bahrain, Mauritius, and Sri Lanka. Reflecting the urgency of balancing global demand with national supply concerns, the statement underscored the necessity of this prohibition amidst skyrocketing global demand.
Orchestration of these exports is the responsibility of the National Cooperative Exports Limited (NCEL), which procures the onions domestically through an e-platform at Level 1 (L1) pricing. The system is designed to afford the produce to entities designated by the importing country’s government at negotiated rates and necessitates a 100 per cent advance payment. The pricing considerations by NCEL are informed by prevailing market rates both internationally and within destination markets.
Maharashtra, as the foremost onion-producing state in India, is notably contributing the largest share of this export allocation. Meanwhile, the government is also permitting the export of 2,000 tonnes of white onion, cultivated explicitly for Middle Eastern and some European markets, underlining India’s commitment to international trade agreements in specific produce categories.
The white onion, largely an export-centric crop, involves greater production expenses attributed to higher seed costs, the adoption of sustainable farming practices, and stringent adherence to international residue limits.
Furthermore, the Price Stabilisation Fund (PSF) under the Department of Consumer Affairs has set a target to accumulate a buffer stock of 5 lakh tonnes of onions from the 2024 Rabi crop. Central bodies like the National Cooperative Consumers’ Federation of India (NCCF) and the National Agricultural Cooperative Marketing Federation of India (NAFED) are in the process of enlisting local bodies to guarantee efficient procurement, storage, and farmer registration in anticipation of the upcoming season’s harvest.
To encourage engagement with this initiative, a high-level team comprising officials from the Department of Consumer Affairs, NCCF, and NAFED toured Nashik and Ahmednagar districts in Maharashtra from April 11-13, 2024, to promote the planned procurement among local farmers and cooperatives.
Addressing the problem of post-harvest losses, the department has committed to expanding the quantity of onions subjected to irradiation and stored in cool conditions from 1,200 tonnes last season to over 5,000 tonnes this year, with the technical backing of the Bhabha Atomic Research Centre (BARC) in Mumbai. This expansion is based on a successful pilot that demonstrated a reduction in storage losses to under 10 percent.
The context of this export initiative was amplified by data released in March by the Union Agriculture Ministry, which projected a dip in the expected onion yield for 2023-24 to approximately 254.73 lakh tonnes from the prior year’s 302.08 lakh tonnes. Notably, states like Maharashtra, Karnataka, Andhra Pradesh, and Rajasthan have reported significant decreases in their output, which has influenced the overarching decision to control onion exports nationally.
As the situation stands, the Indian government’s decision to allow controlled exports is a strategic move to foster positive relations with neighboring states while attempting to keep the domestic market stable in the face of a potential shortage due to lower crop yields.
